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Arrow? More like Boomerang, amirite? Computacenter buys back tech disposal biz it disposed of

IT kit recycling arm that 'wasn't core' turns out to be important

London-listed tech supplier Computacenter has revealed it snapped up the IT asset disposal business RD Trading (RDC) in the UK from Arrow Electronics Inc, just four years after flogging it to Arrow's British tentacle for £56m.

Over the past few years, Computacenter has had an agreement with the distributor for the continuation of IT disposal services, which the pair inked at the time of the sale.

Computacenter CEO Mike Norris said in a statement: "The motivation behind the acquisition was to protect the service for our major customers.

"We fully respect Arrow's decision to step out of the [IT asset disposal] business globally."

Financial details for the deal were not disclosed, but as analysts at TMV opined: "Computacenter would not have paid anywhere near the £56m it got for RDC's disposal four years ago."

Back in 2015, Norris said the board hadn't been looking to sell the recycling arm but had simply received an offer that was too good to refuse. The big cheese said at the time: "For us, it's about the corporate client; our business is pretty clear. We liked RDC being part of our organisation but it wasn't core."

Arrow noted in its results for Q2 ended 29 June (PDF): "We are winding down the personal computer and mobility asset disposition business. We believe this business is not sustainable over the long term, and it is no longer aligned with our strategy."

The parent group saw a decline of 2 per cent in reported components sales in Europe – from $1.42bn to $1.39bn – although global sales were flat year over year.

RDC provides management of collections, warehouse processing, secure data eradication and re-marketing of refurbished kit.

Arrow CEO Michael Long said in a call with investors at the time that "how [the asset disposal business] used to work is, there was a profit share program with those customers. What it has evolved to is customers having a warehouse full of products and wanting one cash check for them... So, it became harder and harder to make a profit from the buy to sell."

According to its last filed accounts (PDF) for the full year 2017, RDC, first incorporated in 1992, turned over £47.3m, up from £46.6m, and reported an operating profit of £1.2m, down 67 per cent from the £3.7m of 2016. The filing said the firm had a headcount of 301.

TMV noted: "While the irony of Arrow's sale back to Computacenter for essentially the same reason is not lost on us, it is ultimately a very sensible move for both sides.. While it might not be 'money spinning' in itself, ensuring customers continue to have access to these services as part of larger infrastructure/services contracts makes it a very worthy investment." ®

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